3 tips for growing a successful franchise in the U.S. | Global Franchise
Global Franchise

Saturday 20th August, 2022

Search Stay in the loop Sign in Join Global Franchise Pro
Logged out article
3 tips for growing a successful franchise in the U.S.


3 tips for growing a successful franchise in the U.S.

Here’s how franchisors can make their business offering compelling enough to recruit franchisees and succeed in the States

Here’s how franchisors can make their business offering compelling enough to recruit franchisees and succeed in the States

Every day, entrepreneurs in the United States are seeking out their own versions of the ‘American dream’ by aspiring to become their own bosses. For many, this dream is best achieved through franchising for a number of reasons, ranging from the support provided by franchisors, to the various levels of financial requirements. Fortunately for these prospective franchisees, there are more than 3,000 franchise brands offering ownership opportunities across the U.S. today.

But franchising is not exempt from the basics of supply and demand, and unfortunately for franchisors, it appears that supply of the franchise opportunities available today exceeds the number of individuals actually looking to become franchisees. As U.S. employment is on the rise, a smaller percentage of people are looking to pursue business ownership. Competition is fierce and the cost is high for acquiring new franchisees to grow your business in the U.S.

So, how can a franchisor stand out in this environment? Here are three tips for how you can increase your chances of making your business offering compelling enough to succeed in the U.S.

TIP #1: Grow smarter, not harder
If you are eager to grow, it is tempting to start recruiting as many franchisees across as many regions as possible to push for accelerated expansion. But without conducting the right research to ensure that the prospects and the territories are the right fit for your business model, this approach is not sustainable. Even with the right franchisee in a territory without direct competitors, you could still find that a business that excels in the southeastern U.S. may not reap the same positive results in the northwestern U.S. This is not only a result of different target audience preferences, but it could also be due to state regulations.

Franchising in the United States is highly regulated and is trending toward even greater scrutiny. Regulations in some states are downright onerous and may not accommodate the most successful versions of certain brands’ business models. Do not set yourself or your franchisees up for failure by trying to grow your business somewhere where it cannot succeed. If you do not already have a presence in the U.S., do your research and think twice before entering certain U.S. markets.

TIP #2: Marketing is king
With so many franchise opportunities available today, having a solid franchise business model means nothing if no one knows it exists. Market penetration without brand awareness is near impossible in this competitive space, especially if your brand is new to the U.S. Considering there are two consumer audiences to address in franchising – the brand customer and the franchise candidate – you need to invest in dual marketing efforts. High brand awareness among customers is useless without enough franchisees to make the brand available to those customers. Once you’ve earned the business of a franchisee, you then need to equip them with the right tools to promote their services effectively to earn the business of the customers in their respective markets.

“Tradition and legacy are important, but you will not attract new franchisees with a tired business model”

Since marketing has become perhaps the most dynamic part of business, remaining informed and nimble in this area is more important than ever. What needs to be emphasized across all of these marketing efforts is your brand’s unique selling proposition (USP) that distinguishes it from its many competitors. Without this, your brand’s messaging will get lost in the noise of all the other aggressive marketing tactics a consumer is met with on a daily basis. And if you do not have a compelling USP to promote, then my next tip may have the answer for what you need to do to find it.

TIP #3: Be a disruptor
The U.S. is a hotbed for innovation. Apple, Amazon, Netflix – all of these are known for completely transforming industries, and each of them began in the States. Fueled by technology and a connected marketplace, business model disruption is happening across all industries. Franchise or otherwise, we are all faced with a choice: will we be the business that becomes obsolete when the “next big thing” comes along in our industry, or will we be the disruptor leading the start of a new era for our industry?

Of course, consistent innovation is a costly endeavor that may or may not guarantee positive outcomes for your business. Nonetheless, you should not let the risks associated with disruption deter you from taking your business to new heights that were once not even possible. Tradition and legacy are important, but you will not attract new franchisees with a tired business model. If you want to recruit forward-thinking franchise owners, then your brand needs to be forward-thinking as well. In order to give those franchisees a successful business model to work with, the brand’s offerings must be relevant to the constantly-evolving needs and expectations of the modern consumer.

Endless opportunities, endless responsibilities
Overall, the United States is a playground for successful franchising, as the business model has been proven and is widely accepted by consumers here. Even with tight competition and the recruitment challenges presented as employment is on the rise, there is still a large pool of franchising talent available.

With that being said, growing a successful franchise in the U.S. is by no means an easy undertaking, and it requires a good bit of patience. But with the right talent and setting, adequate capitalization, and a commitment to making an impact, your brand will be on its way to fulfilling its own American dream.

Mike Bidwell is president and CEO of Neighborly, a franchise company specializing in service businesses

Listen to our chat with Mike on the Global Franchise Podcast on Apple Podcasts, Spotify or Google Podcasts

Start making informed business decisions. Join Global Franchise Pro for free today.

Latest trends and investment opportunities

Unlimited access to industry news and insight

Exclusive market reports and expert interviews